Issue 3: Combinations

The parties dispute whether the amendment to their ICA should specify terms and conditions for UNE combinations.

SBC contends the agreement must be amended to reflect the restrictions on combinations set forth by the Supreme Court in its decision in Verizon Communications Inc. v. FCC. (Verizon, 535 U.S. 467 (2001).) According to XO, the TRO affirmed existing rules regarding UNE combinations, and it is improper for SBC to add limitations and restrictions regarding UNE combinations. In XO's view, the existing agreement already included language addressing combinations and SBC has never invoked the change of law provisions to modify that language. SBC offers no reason why the language needs to be modified.

XO correctly points out that the TRO affirmed existing UNE combination rules. (TRO, para. 573.) In addition, the FCC notes the new requirements of the Verizon decision that UNE combinations be technically feasible to preserve the reliability and security of the ILEC's network. (Id., para. 574.) ILECs must prove to state commissions that a combination request is not technically feasible. (Id.) I agree with XO that SBC has not justified new language restricting UNE combinations. The language proposed by XO requires combinations for UNEs pursuant to FCC regulations and "applicable law." Thus, XO may not request combinations that violate the limitations on combinations detailed by the Supreme Court in its Verizon decision. SBC's language involves over four pages of detailed verbiage relating to its interpretation of the Verizon decision. I find that a simple reference to "applicable law" is sufficient and does not clutter the agreement with potentially ambiguous or disputed interpretations. The amended ICA should include Section 3.14.2 as proposed by XO.